4.1 Description of Source Selection Methods
4.1.1 Formal Solicitations — Invitation for Bid (IFB)
4.1.1.1 General
An IFB is a formal solicitation by which competitive sealed bids are invited through a public notice procedure which results in an award to the lowest responsible, responsive offeror.
4.1.1.2 Use
IFBs are normally used when the procurement is for construction, goods, or non-professional services. An IFB is used for procurements valued at $100,000 or more. An IFB may be used for professional services if the Director determines that:
(a) Specifications are defined in sufficient detail to allow a contract award without further need to clarify the scope of work; and
(b) The ability of the offeror may be established through criteria such as years of experience, licenses held, degrees awarded, or other objectively measurable criteria.
4.1.1.3 Contents
An IFB should include the following information:
(a) Instructions to offerors in a form authorized by the Director.
(b) A notice of the date, time and place for submission of the bids and for the bid opening, and a statement of the number of copies required to be submitted.
(c) The date, time, and place where the pre-bid conference, if any, will be held.
(d) The identity and telephone number of a contact person within the Using Department for technical information pertaining to the solicitation. The identity and telephone number of a contact person in the Office of Procurement for administrative information relating to the solicitation.
(e) A description of or specification (including any plans or designs) for the construction, goods, or services that are to be procured, with sufficient specificity and detail to permit full and free competition and direct incorporation into a contract document without need for further change or amendment.
(f) A concise explanation of the method of the award, e.g., whether the award is based on the lowest bid price, the lowest evaluated bid price, or some other cost or price criteria, whichever is applicable. If an evaluated bid price is used, the objective measurable criteria to be used must be set forth in the IFB. These criteria may include:
(1) length of the usable life of the particular goods as compared to competitive goods;
(2) the degree and quality of services;
(3) the environmental impact of the goods and services being offered;
(4) the resale value of the goods; and
(5) the operating costs associated with the goods such as:
(A) availability, cost, quality, and delivery of parts
(B) availability and cost of service; and
(C) cost of maintaining a spare parts inventory.
In addition, where alternates are solicited, the IFB must specify whether alternates will be considered in the evaluation of the bid and, if so, must indicate the basis for utilization of alternates in arriving at a determination of the lowest bid price or the lowest evaluated bid price.
(g) A listing of all required submissions by the offeror including samples, descriptive literature, and all other submissions which, if missing from the solicitation response, are grounds for disqualification as being non-responsive.
(h) All mandatory clauses.
(i) Optional provisions applicable to the particular procurement involved, as appropriate.
(j) A statement of the MFD requirements, if applicable, as authorized by the Director.
(k) Insurance and bond requirements, if applicable.
(l) A provision that requires acknowledgment by offerors of all solicitation amendments.
(m) Information pertaining to delivery and performance under the contract.
(n) An identification of the administrators of the contract, a statement of requirements for inspection and acceptance by the Using Department and a delineation of authorities and responsibilities of the Using Department with respect to the contract (i.e. authority to recommend payment of invoices, non-authority to amend the contract, etc.).
(o) A statement that the bid may be accepted within 120 days (or such other time as approved by the Director) from the date of opening of the bids.
(p) All IFBs must provide appropriate spaces for:
(1) All bid prices which must be the basis for the award; and
(2) Signature by a person authorized to bind the offeror to the bid, indicating agreement with all provisions of the IFB.
4.1.1.4 Procedure
(a) IFBs are issued and public notice given under the direction of the Director.
(b) Responses to the IFB are received by the Director, as specified in the solicitation, time-stamped, and publicly opened.
(c) Bids are tabulated and forwarded to the Using Department for evaluation when deemed appropriate by the Director or when specifically requested by the Using Department Head.
(d) The Director may require the Using Department or other person to evaluate the bids in accordance with the method of award criteria, and for responsiveness and responsibility, and forward recommendations to the Director. These recommendations must include an evaluation regarding the reasonableness of the proposed award prices. If retained by the Director, the Director evaluates the bids in accordance with the method of award criteria, and for responsiveness and responsibility.
(e) In the case of tie bids, the Director resolves a tie by application of the following criteria in the order stated:
(1) Making a proposed award of the contract to the bidder who has its principal place of business in Montgomery County;
(2) Making a proposed award of the contract to the bidder who is a certified MFD business prior to submitting a bid;
(3) Drawing of lots with representatives of the firms involved invited to be present.
(f) The Director reviews the recommendations of the Using Department and, if necessary, conducts an independent review of the bid responses, and makes a proposed award decision.
(g) The name of the proposed contract awardee or notice of IFB cancellation is posted on a public notice by the Director.
(h) The Director reviews the contract for conformance to the requirements of the Office of the County Attorney.
(i) The Director ensures the encumbrance of required funds, as appropriate, and executes the contract on behalf of the County. The Director provides for distribution of copies of the contract to the Using Department and the contractor.
4.1.2 Formal Solicitation — Best Value Procurement — Request for Proposals (RFP)
4.1.2.1 General
An RFP is a formal solicitation for competitive sealed proposals. Proposals are not publicly opened. An RFP is a procurement process in which quality and price are balanced to obtain the best value for the County. Final costs and scope of work are subject to negotiation after the proposals are received and before the contract is awarded unless otherwise stated in the RFP.
4.1.2.2 Use
(a) An RFP is used for the procurement of professional services.
(b) An RFP is utilized when (1) a Using Department can generally formulate the scope of work or specifications for the services or system to be acquired; (2) there are known sources of supply; (3) competition is anticipated; and (4) the procurement is valued at $100,000 or more.
(c) An RFP is used when other considerations as well as cost are valid criteria in the evaluation of offers.
(d) An RFP may also be used for the procurement of construction, goods, or nonprofessional services when the County determines that the use of evaluation criteria authorized for use in an RFP would promote the best interests of the County. Approval to use an RFP instead of an IFB for the procurement of construction, goods, or nonprofessional services must be obtained from the Director.
4.1.2.3 Contents
An RFP should include the following information:
(a) A notice of the date, time and place for submission of proposals and a statement of the number of copies required to be submitted.
(b) The date, time, and place where a pre-proposal conference, if any, will be held.
(c) The identity and telephone number of a contact person within the Using Department for technical information pertaining to the solicitation. The identity and telephone number of a contact person in the Department of General Services, Office of Procurement, for administrative information relating to the solicitation.
(d) A brief description of the project and scope of work. The scope of work should be described with sufficient specificity and detail to permit full and free competition.
(e) A concise explanation of the method of award that includes identification of all criteria and relative weights for each criterion.
(1) The Using Department, however, may choose not to publish relative weights for each criterion, in which case the Using Department must indicate to the Director its decision to maintain the weights as confidential until after award and, on a separate document, forward the relative weights to the Director. If oral interviews are contemplated, the objective criteria for determining when, how many, and which offerors are eligible for the interview stage must be specified.
(2) An explanation of point scoring for screening and interview steps must also be included (e.g. an explanation of the relationship between written submissions and oral interview evaluations).
(3) If the Using Department determines that guidelines would assist the QSC in evaluating an award criterion, the Using Department must develop scoring guidelines for that criterion for use by the QSC. Normally the Using Department should develop guidelines for a cost criterion. If the Director requests, the Using Department must send the Director a copy of the scoring guidelines with the QSC evaluation. These guidelines are confidential until a proposed award is posted.
(4) The RFP may contain a minimum score which establishes a threshold that an offeror must achieve in order to be considered for an award under the RFP. In the alternative, the RFP may provide for a multi-step process, each step constituting a pre-qualification process (e.g., top five rated offerors based on scoring of written evaluations proceed to a final evaluation stage which may include cost competition or oral interviews).
(5) Evaluation criteria may include:
(A) General experience and technical competence.
(B) Past performance record on other County projects.
(C) Related experience on similar projects.
(D) Compatibility of size of firm with size of proposed project.
(E) Knowledge of local conditions, codes and ordinances where such knowledge is essential to the proper performance of the contract.
(F) Current total workload of the offeror and the capacity to accomplish the proposed work in the required time.
(G) Special familiarity with project or project site.
(H) Special qualifications, experience, design approach, etc.
(I) Originality and design quality of previous work.
(J) Adequacy of office facilities where services will be rendered.
(K) Involvement of consultant's management and participation of key officials in the project.
(6) Evaluation criteria must include appropriate cost factors. Points assigned to the cost criterion must be contained in the decisive selection step (e.g., final interview stage or last screening step when no interviews are held). The cost criterion may be contained in earlier steps in the selection and evaluation process, if the points in that earlier step are part of the final total point score.
At least 10 percent of the total points for all evaluation criteria must be assigned to the cost factor. Ten percent is a minimum value and may only be used with the approval of the Director; Using Departments should use, in appropriate procurement situations, a cost selection factor greater than ten percent.
An RFP may provide for a selection process that requires each offeror who meets a pre-established score to compete for designation as the top-ranked offeror on the basis of price alone. A price submission under this process must be submitted in a sealed offer. If required in the RFP, the price offer must be binding on the offeror. The RFP may require that the price offer be submitted at any point during the evaluation process.
Hourly rates for personnel, cost data, and proposed costs must include all multipliers and overhead charges (e.g., General and Administrative overhead, profit, etc.).
(7) As an alternative to including a cost criterion, a Using Department may utilize a pre-planned cost negotiation process if authorized by the Director.
The pre-planned cost negotiation process allows the Using Department to negotiate with the top ranked offeror under a process which ensures a fair and reasonable cost for the contract. This process includes a written analysis, supported by appropriate documentation, of reasonable cost or ranges of cost for each category of goods or services and an estimated value of the entire contract work. This analysis must be provided to the Director by the Using Department prior to opening of the proposals. The Using Department negotiates the price of the contract with the top-ranked offeror; the price should fall within the amount estimated in the Using Department's analysis.
(8) References must not be used as an evaluation criterion.
(f) All mandatory clauses.
(g) Optional provisions applicable to the particular procurement involved, as appropriate.
(h) A statement of the MFD requirements, if applicable.
(i) Insurance and bond requirements, if applicable.
(j) A provision which requires acknowledgment of all amendments or addenda by offerors.
(k) Information pertaining to delivery and performance under the contract.
(l) An identification of the administrators of the contract, a statement as to requirements for inspection and acceptance by the Using Department, and a delineation of authorities and responsibilities of the Using Department with respect to the contract (i.e., authority to recommend payment of invoices, authority to review the work and approve it, non-authority to amend the contract, etc.).
(m) A statement that the proposal may be accepted within 120 days (or such other time as approved by the Director) from the date established for receipt of offers.
(n) In the RFP, the Using Department must provide an appropriate space for signature by a person authorized to bind the offeror to the proposal, indicating agreement with all terms and conditions of the proposal.
4.1.2.4 Procedure
(a) RFPs are issued and public notice given under the direction of the Director.
(b) Without public opening, the Director forwards timely received proposals to the Using Department for evaluation.
(c) The Using Department establishes the QSC members, with the written approval of the Director. Each member of the QSC must be an employee of a public entity, unless specific authorization is obtained from the CAO for another to serve on the QSC. Unless otherwise provided in these regulations, the committee must be composed of an odd number of members and must have at least three members.
(d) The Director may add members to the QSC when appropriate to enhance the ability of the QSC to fairly and objectively evaluate the proposals. When the Director adds members to the QSC, the composition of the QSC does not need to remain an odd number.
(e) The QSC evaluates all proposals received from the Director, in accordance with the evaluation criteria, and reviews offerors for responsibility.
(1) The chair of the QSC is responsible for assuring that the proper evaluation procedures are followed by the QSC. Questions regarding specific procedural issues should be referred by the chair to the Director. Decisions of the QSC must be determined by majority vote.
(2) Although each member of the QSC must exercise independent and impartial judgment in evaluating a proposal, the QSC must award to each offeror a single score for each criterion. The score should be issued on such information as a reasoning mind might accept as adequate to support the score. It is within the QSC’s province to resolve conflicting information regarding a potential awardee and, where inconsistent inferences can be drawn, it is for the QSC to draw those inferences.
(3) The evaluation must be based solely on the material presented to the entire QSC pursuant to the submission requirements of the RFP. Accordingly, each member of the QSC must be present during such evaluation procedures as site visits, demonstrations, and interviews.
(4) Each member of the QSC must participate, and vote in the scoring of each proposal. If a member of the QSC does not complete the evaluation process, the Director must determine how the QSC evaluation process must proceed. The Director may establish a process that will maintain a fair and competitive evaluation process including:
(A) Requiring the remaining members to proceed with the evaluation;
(B) Requiring that scores already awarded be adopted;
(C) Appointing a new member to the QSC;
(D) Requiring the QSC to evaluate proposals anew; and
(E) Convening a new QSC.
(5) A member of the QSC may not participate in the evaluation and selection process if that member cannot render an independent and impartial judgment because of a relationship with an offeror. Each member of the QSC must certify in writing that:
(A) the member has used independent and impartial judgment as a member of the QSC;
(B) that the member has complied with the requirements of:
(i) Section 19A-11, Montgomery County Code, which prohibits participation in matters where there is a conflict of interest;
(ii) Sections 19A-12 and 11B-52, Montgomery County Code, which prohibit employment relationships between a County employee and an offeror;
(iii) Section 19A-15, Montgomery County Code, which prohibits the disclosure of confidential information;
(iv) Sections 19A-16 and 11B-51, Montgomery County Code, which prohibit the solicitation or acceptance of gifts from offerors; and
(C) no relative or member of the QSC’s household (as both terms are defined in the Montgomery County Public Ethics Law) will be affected by any contract awarded under the solicitation.
(6) The formal meetings of a QSC during which proposals are evaluated are closed to non-QSC members.
(7) The QSC may at any time meet with other County staff as to procedures, standards, and technical information relative to the solicitation, but not regarding the content of specific proposals.
(8) The QSC may meet with County staff and a consultant regarding a solicitation, including the contents of a specific proposal, with the specific concurrence of the Director.
(f) In the case of a tie in the numerical QSC scored, the Director resolves the tie by application of the following criteria in the order stated:
(1) the offeror who has its principal place of business in Montgomery County;
(2) the offeror who is a certified MFD business prior to submitting a proposal;
(3) Drawing of lots with representatives of the firms involved invited to be present.
(g) After the QSC ranks the offerors, the QSC must forward the recommended ranking to the Using Department Head, including a recommendation of the responsibility of the recommended proposed awardee.
(h) The Using Department Head reviews and forwards the QSC recommendation with concurrence, objection, or amendment to the Director. The Using Department Head may also recommend cancellation of the procurement. These recommendations must be accompanied by QSC conflict of interest certifications and a score sheet summarizing the scores awarded by the QSC to each offeror.
(i) The Director approves, approves with conditions, or rejects the recommendations and supporting documentation. If the Director agrees with the recommendation of the Using Department Head, the Director may proceed immediately to authorize negotiations. If the Director approves the Using Department Head’s recommendation for proposed award with conditions, the Using Department must satisfy the conditions and provide appropriate documentation of compliance to the Director, prior to commencing contract negotiations. If the Director rejects the using Department Head’s recommendation for proposed award, the RFP package is returned to the Using Department Head for further action as indicated by the Director.
(j) After the Director’s approval of a recommendation for proposed award, the Director or the Using Department negotiates the contract with the proposed awardee prior to making a proposed award. The Using Department is responsible for coordination of MFD compliance review with the Director. If a contract cannot be successfully negotiated with the proposed awardee, the Using Department will proceed to negotiate with the next highest ranked offeror after obtaining approval from the Director.
(k) If the Director approves, negotiations may be held simultaneously or successively with one or more offerors prior to making an award.
(l) The Director must post public notice of the name(s) of the proposed awardee(s). Public notice also is required in the event of solicitation cancellation.
(m) After the Director has posted the proposed award and has ensured the encumbrance of required funds, the Director may execute the contract on behalf of the County. The Director provides for distribution of copies of the contract to the Using Department and the contractor.
(n) A Notice to Proceed, if necessary, is issued by the authorized government official, pursuant to provisions of the contract.
4.1.3 Abbreviated Formal Solicitations
4.1.3.1 General
An abbreviated formal solicitation is a method for obtaining competitive sealed bids or competitive sealed proposals by using an abbreviated formal solicitation process.
4.1.3.2 Use
An abbreviated formal solicitation may be used if the Director finds:
(a) the estimated value of the procurement, including any extension, is $200,000 or less; and
(b) the abbreviated formal solicitation process is in the best interest of the County.
4.1.3.3 Procedure
(a) If the solicitation would normally be accomplished under an IFB, the following changes are made to the IFB process:
(1) The Department of General Services, Office of Procurement, issues notice of the IFB to at least 25 randomly selected potential bidders on the bidder’s list or all of those on the bidders list, whichever is smaller. The Department of General Services, Office of Procurement, may also issue notice to additional potential bidders. At least 20%, if available, of those who are sent notice of the IFB should be minority owned businesses. The previous supplier of the goods, services, or construction being acquired should also receive notice of the IFB.
(2) The IFB should allow a bidder a minimum of 10 days in which to submit a bid.
(b) If the procurement would normally be accomplished under an RFP, the following changes are made to the RFP process:
(1) The Department of General Services, Office of Procurement, issues notice of the RFP to at least 25 randomly selected potential offerors on the bidder’s list or all potential offerors on the bidder’s list, whichever is smaller. The Department of General Services, Office of Procurement, may also issue notice to additional potential offerors. At least 20%, if available, of those who are sent notice of the RFP should be minority owned businesses. The previous contractor who supplied the goods, services, or construction being purchased should receive notice of the RFP.
(2) The RFP should allow an offeror a minimum of 10 days in which to submit a proposal.
4.1.4 Formal Solicitations — Request for Expressions of Interest (REOI)
4.1.4.1 General
An REOI is a formal solicitation for competitive sealed responses containing qualifications and other requested information from prospective sources of the County's requirements. An REOI is initiated to obtain essential procurement information needed to prepare a subsequent solicitation. The purpose of an REOI is to develop a ready source of potential offerors who can respond within a short time frame to the subsequent solicitation. An REOI may be used to resolve technological or programmatic questions relative to how requirements can best be supplied. Responses to REOIs are not publicly opened and are analyzed in accordance with evaluation criteria set forth in the REOI for the purpose of developing a shortlist of prospective offerors. Evaluation criteria contained in an REOI should be confined to technical considerations and expertise, and should not ordinarily contain considerations of cost.
4.1.4.2 Use
(a) REOIs are used where sources of supply are not readily identifiable and there is a need to define both sources of supply and qualified interest in meeting certain County needs.
(b) REOIs are used when the end result or product has been generally articulated by the County, but the technical approaches or specifications for the product are not sufficiently defined to insure effective competition.
(c) REOIs are used when there are continuing procurement needs in certain technical areas and readily available qualified sources of supply are necessary to meet timely government requirements. Once the sources of supply are identified, they may be the exclusive sources to which expedited solicitations are directed.
4.1.4.3 Contents
An REOI should include the following information:
(a) A notice of the date, time and place for submission of proposals and a statement of the number of copies required to be submitted.
(b) The date, time and place where a pre-submission conference, if any, will be held.
(c) The identity and telephone number of a contact person within the Using Department for technical information pertaining to the solicitation. The identity and telephone number of a contact person in the Department of General Services, Office of Procurement, for administrative information relating to the solicitation.
(d) A brief description of the project desired and a statement of parameters within which the services are to be rendered. Such description should contain sufficient detail to constitute meaningful notice to potential suppliers and to facilitate responses.
(e) A concise explanation of the method of ranking and shortlisting, which must include identification of all evaluation criteria and relative weights for each criterion. Evaluation criteria may include those criteria used to evaluate proposals in response to an RFP.
Evaluation criteria for REOIs should not normally include cost factors. If oral interviews are contemplated, the objective criteria for when, how, and which respondents are eligible must be specified. An explanation of point scoring must also be included (e.g. the relationship between written submissions and oral interview evaluations).
The REOI may contain a minimum score which establishes a threshold that an offeror must achieve in order to be considered for inclusion on the shortlist.
(f) A statement of the maximum number of respondents to be included in the shortlist or objective criteria by which a cut-off is established.
(g) The REOI should also specify the method by which subsequent contract awards are to be made under the shortlisting which results from the REOI, e.g., IFB or RFP.
(h) A provision that requires acknowledgment by offerors of all solicitation amendments.
(i) A statement of the period of time that the shortlist is effective and subject to subsequent solicitations or identification of a specific subsequent solicitation to which the shortlist is applicable.
(j) In the REOI, the Using Department must provide a specific place for signature by the person authorized to bind the responding firm to its expression of interest, including all representations made and information furnished in response to the REOI.
4.1.4.4 Procedure
A procurement pursuant to an REOI is accomplished by the subsequent issuance of one or more solicitations, as stated in the REOI document. The REOI solicitation is accomplished by the following steps:
(a) REOIs are issued and public notice given under the direction of the Director.
(b) The Director forwards, without public opening, timely proposals received by the Director to the Using Department for evaluation.
(c) The QSC evaluates the proposals received from the Director, in accordance with the evaluation criteria, reviews offerors for responsibility, and forwards its recommendations to the Using Department Head. The QSC evaluation process and QSC certification which applies to an RFP also applies to evaluation of an REOI proposal.
(d) In the case of a numerical score tie for the last cut-off position (e.g. a tie at 5th place when top five are shortlisted), all firms tied at that position are added to the shortlist.
(e) After Director approval, the names of the proposed shortlisted firms are placed on a public list by the Director.
(f) For purposes of subsequent solicitations, there is no ranking within the shortlist, and all firms contained on the shortlist are to be considered of equal merit. A shortlist established by an REOI constitutes the exclusive pool of prospective offerors for future solicitations specified in the REOI.
(g) When appropriate and pursuant to the terms of the REOI, the Using Department initiates one or more solicitations for distribution to the entire shortlist resulting from the REOI. Each solicitation must meet all requirements of these regulations, including MFD requirements as appropriate.
(h) The Director may authorize the Using Department to negotiate a contract with a responding firm without issuing a subsequent solicitation if:
(1) only one firm responded to the REOI; and
(2) the Director makes a determination and finding that negotiation is in the best interests of the County.
4.1.5 Competitive Negotiation
4.1.5.1 General
Competitive Negotiation is a negotiation process that is authorized pursuant to Chapter 11B, Montgomery County Code. It is a method of procurement which may take place only after an IFB or RFP has failed to produce acceptable bids or proposals and only after a determination and finding by the Director that further competitive bidding would be impractical and not in the best interest of the County. It is an attempt to negotiate a contract to meet, as nearly as possible, County requirements.
4.1.5.2 Use
Competitive negotiation is used when the Director determines at least one of the following exists after the required solicitation:
(a) No bids or proposals are received by the time and date specified in the solicitation;
(b) Only one bid is received;
(c) The Director has determined that none of the bids or proposals received are acceptable;
(d) None of the bids or proposals received meets County price or budget limitations, including fairness and reasonableness of price; or
(e) The Director has determined that none of the offerors are responsible.
4.1.5.3 Procedure
(a) Prior to the commencement of negotiations, the Director must notify by public listing the County's intent to negotiate a contract under this section.
(b) Competitive negotiations may be accomplished as follows:
(1) Where no timely bids or proposals are received or only one timely bid is received, negotiations may take place concurrently with all those solicited who indicate a desire to participate in the negotiations, after notice by public posting and other informal communications inviting participation deemed appropriate by the Director;
(2) Where bids or proposals are received, negotiations may be held with the bidder or proposer who most nearly complies with the County's requirements (including price) to attempt to reach and negotiate an acceptable offer. If negotiations fail with the most qualified bidder or proposer, negotiations may proceed to the next most qualified bidder or proposer, upon authorization from the Director.
4.1.6 Open solicitation
4.1.6.1 General
An open solicitation is a process by which the County accepts applications for a contract on a continuing basis and awards a contract to each applicant who meets pre-established objective qualifications. An open solicitation permits the County to receive and act on an application for a contract award on a continuing basis.
4.1.6.2 Use
An open solicitation is used when the County desires to award a contract to all persons who meet pre-established objective qualifications. Examples of when an open solicitation might be used are:
(a) Obtaining instructors for teaching classes to the general public under programs sponsored by a Using Department;
(b) Obtaining participants in a grant program sponsored by a Using Department;
(c) Providing goods or services to clients identified by a Using Department, if:
(1) the client selects the source of goods or services; or
(2) the client referred is based on an objective method (e.g., rotating basis, geographical proximity); and
(d) Obtaining goods or services under a requirements contract if the Using Department selects the source by an objective method (e.g., rotating basis, geographical proximity).
4.1.6.3 Procedure
(a) The Using Department submits to the Director for approval of a plan which:
(1) Provides for periodic public notice inviting potential contractors to apply for a contract;
(2) Establishes an application process for a potential contractor to follow in order to obtain a contract under the open solicitation;
(3) Establishes the objective qualifications for potential contractors;
(4) Uses a pre-approved form contract which each successful contractor will be required to execute; and
(5) Ensures that the cost of all contracts entered into under the plan will not exceed available appropriated funds.
(b) The Director, or if authorized by the Director the Using Department Head, may award a contract to a person who meets the pre-established objective qualifications under the open solicitation if the solicitation and contract are consistent with the plan approved by the Director.
4.1.7 Informal Solicitation — Mini-Contract
4.1.7.1 General
A mini-contract is a contract for professional and, under special circumstances, non-professional services valued above $10,000 and under $100,000 which is the result of an informal solicitation process. Each informal solicitation notice must be posted on a County website in accordance with Section 11B-17A. The solicitation process requires, at a minimum, documented oral or written contact with prospective offerors, documentation of MFD efforts, and documentation of the results of that contact. A mini-contract is not subject to renewal or amendment for the purpose of increasing its value beyond the maximum limit.
4.1.7.2 Use
(a) A professional services mini-contract is used for the procurement of professional services.
(b) A mini-contract may be used for non-professional services, goods, or construction valued above $10,000 and less than $100,000 if the Director determines that the use of evaluation criteria other than price would promote the best interests of the County.
(c) This source selection method may not be used when the total expenditure (including all extensions) for the project or services to be procured is expected to equal or exceed $100,000. Using Departments may not divide contracts (splitting) for the purpose of avoiding the $100,000 limit.
4.1.7.3 Contents
A mini-contract should include the following:
(a) Mandatory clauses.
(b) An identification of the contractor and a signature which binds the contractor to the contract.
(c) A clear and concise statement of the scope of work to be performed under the contract.
(d) A statement of the term of the contract or dates for initiating and completing performance or both.
(e) A statement of compensation to be received under the contract, including all payment provisions.
(f) Such additional information with respect to contract performance as is required for the particular contract.
(g) Where there is a written proposal received from the successful offeror, the Using Department may utilize a form that references the proposal and incorporates the applicable mandatory clauses. This form must be in a form approved by the Office of the County Attorney.
4.1.7.4 Procedure
(a) The Director must provide the Using Department with the names of 5 randomly selected potential offerors selected from the bidder's list or all potential offerors on the bidder's list, whichever is smaller. One of the potential offerors selected by the Director should be a minority owned business. One of the potential offerors identified by the Director should be the previous supplier of the services, goods, or construction being acquired. The Using Department must attempt to contact each potential offeror identified by the Director. The Using Department may also contact additional potential offerors identified by the Using Department. The Using Department must document fully the contact including recording the name of the firm contacted, the name of the person and position within the firm contacted, and the response received. The contact may consist of oral or written communication. With respect to each offer received, the Using Department must document: (1) whether the offeror indicated a willingness and ability to meet the scope of work in a timely manner; (2) the price quoted for the services to be rendered; and (3) other information pertinent to the procurement decision.
(b) The Using Department makes a determination concerning the most advantageous awardee considering price and other pertinent factors. The Using Department must document the basis of the selection and negotiate a contract with the preferred offeror.
(c) The Using Department forwards the executed contract to the Director with all required documentation, including a forwarding memorandum signed by the Using Department Head stating that: (1) the competitive requirements of this type of procurement have been met; (2) the price is fair and reasonable for the services to be rendered; (3) the offeror is responsible; (4) all attempts to procure MFD contracting including the MFD status of the successful awardee; and (5) the selection, based on price and other considerations, was in the best interest of the County. A purchase requisition document should accompany the executed contract.
(d) The Director receives the contract from the Using Department, ensures the encumbrance of required funds as appropriate, reviews the contract for compliance with the requirements of these regulations, and executes the contract on behalf of the County. The Director may refer any contract to the Office of the County Attorney for review. The Director distributes copies of the contract to the Using Department and the offeror.
4.1.8 Informal Solicitation — Small Purchases
4.1.8.1 General
A small purchase is an informal solicitation for goods, construction or services valued above $10,000 under $100,000. The small purchase is a solicitation initiated by the Using Department, which is responsible for ensuring appropriate informal competition and appropriate documentation. This source selection method should preserve competition on an informal basis and an award must be based on price, responsiveness, and responsibility. The Using Department must contact at least 5 randomly selected potential offerors selected from the bidder's list or all potential offerors from the bidder's list whichever is smaller. At least one of the potential offerors to be selected should be a minority owned business. The Using Department should include among those contacted the previous supplier of the goods, construction or services being acquired. Each informal solicitation notice must be posted on a County website in accordance with Section 11B-17A. This source selection method may not be used when the total expenditure (including all extensions) for the goods, construction, or services to be procured is expected to exceed $100,000. Using Departments may not divide contracts (splitting) for the purpose of avoiding the $100,000 limit.
4.1.8.2 Contents
A small purchase consists of a purchase order document with the successful offeror in a form approved by the Office of the County Attorney. The purchase order document should contain, at a minimum, a clear statement of specifications to be met, delivery schedules and other performance requirements, a statement of compensation to be received by the bidder with payment provisions, and signatures by the offeror and the Director. The purchase order document must also contain mandatory clauses as required by the Office of the County Attorney. In the case of telephonic communications authorized by the Director, a signature from the offeror is not required. When a written proposal is received, a signature on the written submission from the offeror is sufficient.
4.1.9 Direct Purchases
4.1.9.1 General
A direct purchase is an informal procurement of construction, goods or services with a total value of no more than $10,000. Competition should be preserved with this method to the extent practicable. Procurements with MFD and LSBRP firms are encouraged. Subject to revision by the CAO, the direct purchase is handled pursuant to the direct authority of a Using Department Head who is solely responsible for making a proper purchase under these procedures. The Using Department Head must seek fair and reasonable prices for all construction, goods and services obtained under this method.
4.1.9.2 Use
Direct purchases are used to secure goods, construction, or services, when the value of the purchase is not greater than $10,000. Direct purchase procedures may be used even if the construction, goods and services to be obtained are covered by any existing requirements contract with the County. The Using Department should consult with the Director to ascertain the existence of relevant alternative sources. Purchases which in the aggregate would exceed the limit on this type of procurement may not be subdivided or split to procure within the direct purchase limitations. When the need for a particular product or service occurs within a reasonable time frame and can be consolidated, the purchase must be consolidated and not subdivided.
4.1.9.3 Contents
(a) A direct purchase consists of
(1) a Request for Payment form directed to the Department of Finance, Division of Accounts; and
(2) an invoice or receipt from the vendor.
(b) The Request for Payment form must, at a minimum, contain the name and address of the offeror to be paid, signature of the Using Department Head and a description of the construction, goods or services procured and the appropriate account code.
(c) By signing the Request for Payment form, the Using Department Head certifies:
(1) The purchase is necessary.
(2) Funds for the purchase have been appropriated and are available.
(3) The purchase is not covered by any existing requirements contract with Montgomery County, unless authorized by the Director.
(4) The purchase is of a complete and distinct item or service, not related to another or easily combined with another, and the purchase is not of a continuing, repetitious, or periodic nature (large orders may not be subdivided to avoid limits of this procedure). For purposes of this affirmation, substantially similar items are considered to be equal.
(5) The price is fair and reasonable.
4.1.10 Petty Cash
4.1.10.1 General
A petty cash purchase is an informal purchase of goods or services by an employee which is authorized by the Using Department Head and for which the employee is reimbursed by a petty cash voucher executed by an authorized Using Department representative. This method of procurement may not be utilized when the total value of the goods or services exceeds $100.
4.1.10.2 Use
Petty cash purchases are used when the goods and services are valued at $100 or less and there is a Using Department authorization for the expenditure and reimbursement. This purchase may be authorized by the Using Department and utilized when immediacy or administrative convenience is a paramount need of the Using Department.
4.1.10.3 Contents
A petty cash purchase consists of:
(a) a receipt for the goods and services purchased; and
(b) a properly completed and executed petty cash voucher which identifies the expenditure and contains the authorizing signature of an authorized government official.
4.1.11 Emergency Procurements
4.1.11.1 General
An emergency procurement is an informal procurement of goods, construction, or services required as a result of an emergency, i.e., any dangerous condition or unforeseen curtailment, diminution or termination of an essential service which poses an immediate danger to health, life or property. An emergency procurement may be authorized by the Director if the Director is available to authorize the procurement, or by the Using Department Head if the Director is unavailable. The emergency procurement requires documentation of the facts that constitute the emergency. Procurements under this section are limited to those goods, construction, or services required to meet the emergency, and must be made with competition to the extent practical under the circumstances.
4.1.11.2 Use
An emergency procurement is used when there exists facts, properly documented, which constitute an emergency.
4.1.11.3 Contents
(a) If the Director authorizes an emergency procurement, the Using Department Head must send the Director a memorandum within 5 days after receipt of oral or written authorization to undertake an emergency procurement. The memorandum must include a complete description of the facts and circumstances of the emergency and a description of the goods or services obtained, including the actual price or a not-to-exceed amount. The Using Department Head should deliver a copy of the memorandum to the CAO as soon as practicable.
(b) If the Using Department Head authorizes an emergency procurement, the Using Department Head must forward within 5 days the memorandum described above to the Director and the CAO. The memorandum must also contain the date of the authorization and name and title of the authorized government official who authorized the emergency procurement.
(c) Whenever practical, the Using Departments should, in making an emergency procurement, use contract documentation required for a mini-contract or a small purchase. Other types of documentation may be used (e.g., direct purchase) if authorized by the Director. Copies of documents must be furnished to the Director.
4.1.11.4 Authority
If the Director is not available, the Using Department Head may authorize an emergency procurement and issue a contract. These persons are authorized to take expeditious action to ensure timely contractor performance to meet the emergency. Contract issuance authority includes authority to sign contract documents that bind the County.
4.1.12 Non-Competitive Procurements
4.1.12.1 General
A non-competitive procurement is the acquisition by contract of a valid County requirement without prior public notice and without competition.
4.1.12.2 Authority
(a) The Director may make a non-competitive award unless the non-competitive award is based on a sole source justification and the estimated value of the award is above $100,000. If the estimated value of the non-competitive award based on a sole source justification exceeds the threshold for an IFB or RFP, the CRC may approve a non-competitive award after considering the justification from the Using Department. A non-competitive award must be based on a determination and finding.
(b) The Director may make a non-competitive award for maintenance or support of software during the useful life of the software originally purchased, if there is only one source for the required maintenance or support of the software. The one source must meet the minimum valid needs of the County.
4.1.12.3 Use
A non-competitive procurement may be made if the non-competitive award serves a public purpose and one or more of the following factors exist:
(a) There is only one source for the required goods, service, or construction which can meet the minimum valid needs of the County. The basis for identifying a sole source includes:
(1) Proprietary, patented, or copyrighted items or information are available from only one source;
(2) The valid performance or delivery due dates required by the County can be met by only one source;
(3) The required compatibility of equipment, accessories, software, or replacement parts can be met by only one source;
(4) The County requires for trial use or testing an item or service available from only one source;
(5) Required public utility services are available from only one source; or
(6) A continuous series of procurements from a single source over a period of time is advantageous as demonstrated by a cost benefit analysis demonstrating that considerations of training, replacement parts, and compatibility with existing capital investments justify the use of a sole source.
(b) The County requires goods or services for potential or pending litigation, condemnation, or collective bargaining.
(c) A contractor or subcontractor has been specifically identified in a grant accepted by the County.
(d) A proposed contractor has been identified in a grant resolution approved by the Council.
4.1.12.4 Contents
A non-competitive procurement must contain, at a minimum, the following documentation:
(a) A contract which includes specifications reflecting the minimum valid needs of the County. The specifications must be narrowly drawn so as not to exceed the reason which justifies the non-competitive award.
(b) A memorandum from the Using Department Head to the Director which contains a full explanation and justification for the non-competitive procurement.
4.1.13 Standardized Procurements
4.1.13.1 General
A standardized procurement is a purchase of goods that the CRC determines to be equipment for which standardization and interchangeability of parts is necessary or is otherwise in the public interest. A standardized procurement should include competition when reasonably available. Standardization approval must be for a stated period which bears a reasonable relationship to the life of the equipment and the specialized training or specialized equipment necessary to service and maintain the standardized item. A standardization decision includes a decision to procure compatible parts, equipment, services and training.
4.1.13.2 Use
Standardization may be used when:
(a) Goods will be purchased repetitively over a period of time which will require or affect compatibility purchases over an extended period of time.
(b) Standardization will appreciably reduce the variety and quantity of parts that must be carried in stock in order to properly maintain the equipment.
(c) Standardization will produce demonstratable savings in training personnel or in acquiring technical literature and enhance the expertise of personnel in the use or maintenance of the standardized equipment.
(d) The compatibility of the standardized equipment will permit joint or coordinated operational use by and between diverse departments, agencies, or jurisdictions.
(e) Existing equipment, systems or inventories are compatible only with the standardized equipment, parts or services to be procured.
(f) A continuous series of procurements of standardized equipment or parts over a period of time is advantageous, as demonstrated by cost-benefit analysis or similar analysis, because of considerations of training, replacement parts, compatibility with existing capital investments, and other standardization cost benefits.
4.1.14 Public Entity Procurements
4.1.14.1 General
A public entity procurement is an agreement to acquire or use any goods, services, or construction with a public entity upon terms and conditions considered to be in the best interest of the County as determined by the Director. A public entity procurement does not require public solicitation, nor does it require justification as a non-competitive procurement.
4.1.14.2 Use
A public entity procurement is used when it is in the best interest of the County to obtain goods, services, or construction from those available within the public sector. Among the factors to be considered in determining whether a public entity procurement is in the best interest of the County is the cost effectiveness of the proposed procurement.
4.1.14.3 Authority
Public entity procurements are prepared by the Using Department and issued by the Director.
4.1.15 Bridge Contracts
The Director may, without competition, enter into a bridge contract with a person if the Director determines that:
4.1.15.1 The person has an existing contract with another public entity for goods, services, or construction that the County would like to procure;
4.1.15.2 A bridge contract is in the best interest of the County; and
4.1.15.3 the contract between the person and the other public entity was awarded as a result of adequate competition.
The bridge contract must provide the County with materially the same goods, services, or construction being provided the other public entity at the same prices being charged the other public entity. Under extraordinary circumstances, the Director may approve a bridge contract for professional services.
4.2 Contract Types
4.2.1 Fixed Price
4.2.1.1 A fixed price contract is a contract that provides for a firm price under which a contractor bears the full responsibility for profit or loss. This does not include a cost reimbursement contract. All costs involved have been firmly established, in writing, but may be subject to certain adjustments, objectively defined. Such adjustments may include escalator clauses, incentive clauses, and other adjustment mechanisms. Construction contracts are generally fixed price contracts.
4.2.1.2 A fixed price contract is the preferred contract method in the County.
4.2.2 Cost Reimbursement Contracts
4.2.2.1 Cost reimbursement contracts are contracts which provide for reimbursement of a contractor's costs associated with performance of specified contract requirements and a fee if any. These costs may include hourly rates associated with personnel, overhead, out-of-pocket costs, and other costs specified in the contract. For purposes of these regulations, a time and material contract is considered a cost reimbursement contract. The contract must provide a means for ensuring that the costs are fair and reasonable. These means may include a requirement that the contractor document competition. The County has the right to review and approve costs before authorizing reimbursement.
4.2.2.2 A contract must not provide for compensation to be based on cost plus a percentage of cost of the work performed. A contractor must not be financially rewarded for increased costs that are passed on to the County. A contract, however, may provide for reimbursement based upon a cost plus a fixed fee provision or on a compensation provision that rewards the contractor for efficiency by providing for incentive payments.
4.2.3 Requirements Contracts
4.2.3.1 A requirements contract is a contract for an indefinite quantity of goods, construction, or services to be furnished at specific times, or as ordered, at fixed unit prices. During the term of a requirements contract, the County should use reasonable efforts to order all actual requirements of designated Using Departments (or of the entire County) during a specified period of time. Failure to utilize a specific requirements contract for a particular procurement must not be considered a breach of the contractual obligation unless the contract specifically provides that the contractor is the exclusive source for the requirements.
4.2.3.2 Requirements contracts are administered by the Director as a fixed price source of supply which may be utilized by Using Departments through a delivery order issued by the Director. When deemed appropriate, the Director may authorize Using Departments to issue orders directly to the contractors involved. A delivery order must be supported by an encumbrance before it is issued.
4.2.3.3 Where practical, a requirements contract should include a maximum contract amount.
4.2.4 Definite Quantity Contract
A definite quantity contract is a contract that provides delivery of a specified quantity of goods, construction, or services either at specified times or when ordered. Quantities ordered under a definite quantity contract are limited to the quantity stated in the contract, unless the contract contains an increased quantity option.
4.2.5 Multiple Award Contracts
A multiple award contract is one in which more than one contractor is awarded a contract for specified goods, construction, or services. Use of this contract type is subject to approval of the Director. It may take one of the following forms:
4.2.5.1 Geographic Distribution Awards
Geographic distribution awards are contract awards made to separate contractors of goods, construction, or services in separate identifiable geographic areas, when such awards are justified by need for adequate delivery, service, availability, distribution of County contract work, or product compatibility.
4.2.5.2 Multiple Source Contracting
(a) This is contracting where the primary source is one specified contractor and secondary, tertiary, etc. sources perform as backup contractors. In this type of contract, the primary contractor receives all orders for goods or services. The backup contractor (secondary, tertiary, etc.) receives orders only after the primary contractor either fails to deliver under specified conditions in the contract or a specified quantity limit has been ordered from the primary contractor, as specified in the contracts.
(b) Distribution Contracts
These are multiple award contracts which are made for the purpose of distributing orders for particular services or goods among several contractors. Each of these contracts specifies a maximum quantity of goods or services after which the next designated contractor receives orders, on a rotating basis.
(c) Product Need/Compatibility Multiple Awards
These awards are made to several vendors to ensure availability of specific goods or services to meet the needs of Using Departments.
4.2.6 Multi-Year or Term Contracts
Multi-year or term contracts may be authorized by the Director when it is appropriate to obtain uninterrupted services extending over more than one year or contract term, when the performance of services involves high start-up costs, when a continuous source of supply over a multi-year or term period is required, or when a change-over of services involves high phase-in/phase-out costs during a transition period. These multi-year or term contracts take the following forms and may be authorized under the following conditions:
4.2.6.1 Options to extend contracts
Contracts entered into with an original term subject to extension options must be funded with authorized appropriations, as certified by the Director of Finance, for the original term before execution. Thereafter, each option term must be similarly funded before the option may be exercised.
4.2.6.2 Original long term contracts
Original long term contracts are contracts involving a multi-year or term without need for renewal. A multi-year or term contract may be entered into only if sufficient funds are appropriated, and certified by the Director of Finance, sufficient to defray the amount of the first term of the contract. In addition, these contracts may be entered into only upon the following conditions:
(a) The Using Department furnishes to the Director sufficient written documentation to demonstrate that the requirements contained in the multi-year or term contract are reasonably firm and are continuing over the term of the contract. In addition, the Using Department must furnish sufficient documentation to the Director to demonstrate that the contract is in the best interest of the County because it encourages effective competition or promotes economies in performance and operation.
(b) Based upon the documentation submitted, the Director determines that the multi-year or term contract is appropriate after being satisfied that the requirements contained in the contract are reasonably firm and continuing over the term of the contract and that the contract will serve the best interests of the County by its encouragement of effective competition or its promoting economies in contract performance and operation.
(c) The contract must also include a termination provision which provides that in the event funds for terms subsequent to the first term are not appropriated and available for encumbrance for the subsequent years of the contract, the contract may be terminated by the County without further County liability to the contractor.
4.2.7 Incentive Contracts
4.2.7.1 General
Each Using Department should consider the use of an incentive contract. An incentive contract is appropriate when the required goods, services or construction can be acquired at lower costs or, in certain instances, with improved delivery or technical performance, by relating the amount payable under the contract to the contractor's performance. Incentive contracts are designed to obtain specific acquisition objectives by:
(a) establishing reasonable and attainable targets that are clearly communicated to the contractor; and
(b) including appropriate incentive arrangements designed to motivate contractor efforts that might not otherwise be emphasized and discourage contractor inefficiency and waste.
An incentive contract, however, should not operate to reward a contractor for performance results when the cost of those results outweighs their value to the County. Any amount paid as an incentive must be reasonably related to the additional costs of enhanced performance by the contractor or to the value of the enhanced performance received by the County.
4.2.7.2 Types of incentive contracts
(a) A cost reimbursement incentive contract is a contract which provides for reimbursement to the contractor for allowable costs incurred up to a ceiling amount and establishes a formula by which the contractor is rewarded for performing at less than an estimated target cost or exceeds specified performance standards such as time of delivery of contract performance; the contract may provide that the contractor is subject to reduced compensation or specified damages if it exceeds a target cost or fails to meet specified performance standards such as time of delivery of contract performance.
(b) A fixed-price incentive contract is a fixed-price contract in which the parties establish at the outset a target for performance and a formula by which the contractor is rewarded for exceeding performance and may be subject to reduced compensation or specified damages if the performance is not met.